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Council's pay cuts confusing

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Officials at Hazleton City Hall believe politics fueled city council's recent vote to slash pay for several management-level positions, a high-ranking administrator said.

The administration hasn't received a list of the pay cuts approved by council on Tuesday, leaving officials uncertain about the number of employees that could be affected - and whether those cuts extend into departments that do not operate under the general fund budget, Acting City Administrator Steve Hahn said.

But the confusion doesn't stop with the administration.

Even council members who voted in favor of cutting pay provided conflicting lists of employees impacted by the wage reductions.

Council Vice President Jean Mope referred questions about the cuts to President Jack Mundie and Councilman Jeff Cusat, while Mundie said a list of employees impacted by the cuts had been turned over to Hahn.

Cusat said the pay reductions will impact eight management-level positions but Hahn said the city employs a 15-person management group - with most earning less than a minimum $30,000 salary threshold set by council for slashing pay.

Hahn, however, suggested that as many as nine employees could face wage reductions.

As of Friday, Hahn said he has not received a specific list of employees from council or the city clerk about who would be impacted by the pay cuts.

"Transit and (Community Development) are part of Management Salary and Benefit Policy for the City," Hahn said Friday in an email. "The money for their pay may come from other places, but at the meeting (council members) said the reductions were for management/non-union people. Since cuts were not listed per line item and amount it is difficult to decipher what exactly is to change and by how much."

Another problem, Hahn said, is that the pay cuts and numerous amendments that council made last week to the administration's 2014 budget proposal do not balance the spending plan, which raises a red flag for him.

"What they changed does not produce a balanced budget and I was always of the belief that the budgets had to be balanced," Hahn said in an email.

"There are 100 employees in the city and nine are targeted for pay cuts to support increase in expenditures for $9,900 membership in Pa. League of Cities. Many people say that the nine targeted employees are the victims of politics. There are many different views on this."

The cuts

Council voted 3-2 on Tuesday to approve what Mundie called "salary cuts among management." Councilmen Keith Bast and Cusat voted "no" to the pay cuts, while Mundie, Mope and Councilman Dave Sosar voted "yes."

Mundie's motion cut salaries as follows: 2 percent for non-management employees who are paid between $30,000 and $35,000; 4 percent for salaries between $36,000 and $41,000; 5 percent for people who earn between $42,000 and $50,000, and 10 percent for employees who make more than $50,000.

Pay for seven non-union positions will be cut by 10 percent while pay for one other employee will be cut by 2 percent, according to Cusat's interpretation of council's vote.

The last of the cuts is based on Gaudio's last full year's worth of salary, Cusat said. A salary list released by Mundie last week contains only part of Gaudio's 2014 salary, he said.

In some cases, the cuts would result in management earning less money than subordinates. With the police chief, for instance, the base salary would be reduced to about $62,635, which would be lower than the 2014 base salary projected for four lieutenants and three sergeants.

Base salaries were available in a chart that Mundie released last week and cuts were applied according to the scale approved by council.

Although the base salary cuts total $45,157.38, Mundie released a slightly higher figure at last week's council meeting - $48,542.

Cusat believes the difference stems from reductions to FICA, Medicare, unemployment compensation and workers' compensation costs for each employee.

Divided council

Cusat said that he asked council on Tuesday to vote on the pay cuts separate from other amendments because he does not support them.

"I was not in favor of cutting salary at all," he said. "I would like to explore other avenues before cutting somebody's livelihood. The only way I would want to cut anybody's salary is if it was the last resort. To me, it's like raising taxes - that would be the last resort if nothing else can be adjusted."

Bast, who also voted against the cuts, said the council majority cut salaries to pay for an illegally appointed legal advisor.

"You're looking at cutting people in the offices who do a lot of work," he said. "Jack cut 19 or 20 people by a little bit so he can justify paying one of his friends - a council advisor that is illegal."

Like the other budget amendments presented last week, Bast said he hasn't received any documentation or list of cuts from the majority.

"People might not be happy with what we did last year but what we came up with, we actually put thought into it," Bast said. "They're not transparent at all. They just throw things out there and see what sticks to the wall. They won't even be transparent with their own colleagues."

Mope, meanwhile, said she didn't want the names of affected employees published by the media - and that the cuts were not intended to target any specific employees.

"We are cutting salaries in the positions, not the individuals," she said in an email to the Standard-Speaker.

Temporary cuts?

Mundie, meanwhile, said the cuts were proposed as one of many ways of offsetting a 0.55-mill property tax increase that Mayor Joseph Yannuzzi's administration used to generate about $613,000 and balance its 2014 "starting point" budget proposal.

"That's his answer to everything - to just increase taxes," Mundie said. "People are just fed up. They can't afford new taxes."

The mayor's budget proposed increasing taxes from 4.51 mills in 2013 to 5.06 mills this year, but eliminates $500,000 in revenue from a storm water system maintenance fee that was enacted in 2013.

Mundie also said the pay cuts aren't necessarily permanent, and could be lifted if council follows through with several revenue-generating proposals throughout the year.

"We need more revenue," he said. "Once we do that, those cuts can probably be restored."

Possible solutions include selling or taking on more timbering of Hazleton City Authority land, Mundie said.

Council had no choice but to reduce pay for management because union salaries are contractually mandated, Mundie said.

Council would have to discuss whether directors of the Community Development and public transit departments would be affected because they don't directly impact the general fund, Mundie said.

Mundie said that he plans to post a 2014 salary compensation report that he got from administration on the city's website. The chart lists total costs of city employees and includes base salary and other costs such as longevity, shift differential, "total annual wages," FICA, medicare, unemployment compensation, workers' compensation, "total burden," "total compensation," pension costs and a grant total cost for all city employees.

That chart will identify employees by position only, not by name, he said. Taxpayers who want additional information have the right to request it from City Hall, he said.

sgalski@standardspeaker.com

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